Original thinking | 9 January 2026

Monthly news and views covering December

Chris Robinson &

Ian Rees

IN BRIEF

Returns from equities were mixed in December, with some new highs and others easing back following a strong start.
2025 was a year of double digits returns across several different global stock markets.
Commodities, specifically Gold and Silver hit record highs during the year.

For information purposes only. Any views and opinions expressed here are those of the author at the time of writing and can change; they may not represent the views of Premier Miton and should not be taken as statements of fact, nor should they be relied upon for making investment decisions.

Investing involves risk.The value of an investment can go down as well as up which means that you could get back less than you originally invested when you come to sell your investment. The value of your investment might not keep up with any rise in the cost of living.

Premier Miton is unable to provide investment, tax or financial planning advice. We recommend that you discuss any investment decisions with a financial adviser.

For further information on the risks of investment and glossary terms please refer to the end of the document.

The month of December

It’s fair to say that after a strong run for most of the year, it would not have been a surprise to see some weakness in stock markets during December. In the event, returns during December continued to be positive in local currency terms, with the largest moves in currencies resulting in some losses when converted to Sterling. In the US, the S&P 500 Index (total return) ended the month down -1.5% in Sterling terms as the dollar weakened on worries around Venezuela and the US political and military interventions that were seen. In Japan, the Yen continued to fall, taking the Nikkei 225 Total Return index down -1.5%, following concerns regarding higher government spending.

It is worth remembering that currency changes do not reflect actual stock market performance. All major markets in local terms were positive, except for the Nasdaq Composite Index (a stock market index that includes almost all stocks listed on the Nasdaq stock exchange). Meanwhile, the UK FTSE 100 Index hit a record high of 10,000 points for the first time, and the US S&P 500 Index closed in on the 7000-point mark before pulling back. Notable for this US return was the strong Gross Domestic Product (GDP) figure before Christmas. The US economy expanded at an annualised pace of 4.3% in November compared to the 3.3% expected. This reading initially supported markets but also raised concerns that it could potentially limit the number of interest rate cuts that the Federal Reserve might make in 2026.

With geopolitical uncertainty, a major feature of 2025, it’s fair to say the biggest price movement was once again in Gold. Seen as a ‘safe haven’, Gold hit a record high of over $4,500 per ounce during the month, retaining this level following the geopolitical uncertainty in Central America created by the US capture of the Venezuelan president.

2025: A positive year once again

FE Analytics as at 31.12.2025. The performance information presented on this page relates to the past. Past performance is not a reliable indicator of future returns.

Another very strong year has rewarded investors, despite a significant number of geopolitical headlines throughout the year. As such, it may come as a surprise to many to see the strength of returns across major equity markets. So, what were the drivers?

The first quarter of 2025 was all about Europe and its new spending plans. Changes to German government policy allowed it to increase its defence budget alongside that of its European allies, as well as making several promises to spend on infrastructure to support its lagging manufacturing engine. This was heavily supported by the European Central Bank cutting the interest rate, which it proceeded to do across the first half of the year. Most of Europe’s strong returns came during this period.

Then came Trump and his focus on tariffs. This global trade policy appeared to be aimed at raising tax revenue to reduce the US deficit, whilst also seeking to reduce the competitive advantage of China. The approach adopted sought to isolate China and led to several trade deals being negotiated across the globe. It also led to the threat of a trade war between the US and China, which has largely been suspended until November 2026. Did these actions impact the US market? At first yes, but it soon recovered as lower inflation readings and a pressured Federal Reserve started to cut interest rates in the second half of the year. The rate cuts have been extremely supportive of markets, especially as inflation has continued to trend down and growth remains positive. It was at the mid-way point we had Trump announce his “One Big Beautiful Bill”, which provides for ongoing stimulus alongside tax relief to consumers and corporate America for continuing to invest. Some of this relief is only just going to be felt as consumers enter tax returns in January 2026.

What we won’t forget for the US has been the ongoing interest in the Artificial Intelligence (AI) theme and a broadening of its support. DeepSeek, a Chinese competitor to the Chip model put in place by Nvidia, disrupted tech names earlier in the year. However, this theme has continued to excite investors, albeit showing greater interest away from the Magnificent 7 (group of high-performing and influential companies in the U.S. stock market: Alphabet, Amazon, Apple, Tesla, Meta Platforms, Microsoft, and Nvidia) names that previously led this trend higher. Then came the longest government shutdown in history, which didn’t seem to impact on the economy, but did limit availability for economic data used by the Federal Reserve and investors alike. The uncertain US government policy and optimism around interest rate cuts have weakened the dollar. This “de-dollarisation” has helped support global returns away from the US market, specifically helping boost Emerging Markets.

Emerging Markets collectively had their best return since 2017, with Asia benefitting from currency strength and investment. In addition, several Asian countries have adopted governance and market structures similar to Japan to improve standards, valuations, and investor returns. We await to see how these positive developments continue into 2026.

Supportive fiscal policies in China, Japan and Asia have helped boost returns in the second half of 2025. Japan headed into the second half of the year with political instability and worries that a coalition government would not form. Up stepped Sanae Takiaichi, the first female Prime Minister of Japan, with a Trump like approach to spending and a structural ideology likened to former PM Shinzo Abe. Sanae introduced the biggest fiscal package since 2020 with promises to lower inflation. This boosted markets in September but brought about greater caution from the central bank. The Bank of Japan finally reacted in December by raising interest rates, halting a depreciation that has been evident with the Yen.

Closer to home, the UK experienced a build up to interest rate cuts by the Bank of England and an Autumn budget. Neither disappointed, with interest rate cuts coming as a result of weaker growth and low inflation readings. Though some of this may have been down to the prior minimum wage hikes and National Insurance increases for business, it’s quite clear that this budget pushed some of the pain down the road in the hope growth follows. The UK larger company indices have benefited from the resilient global picture, with returns driven by defence names on the back of US, UK and European government spending. In addition, the resilient global economy continues to benefit the banks through ongoing loan growth. This resulted in the larger international businesses of the FTSE 100 Index rising 25.8% while the more domestically oriented medium-sized companies in the FTSE 250 ex investment Trusts Index rose only 13.0%.

Whilst Government spending and interest rate cuts have been key focus points for stock markets, the former has led to ongoing volatility for government bond markets. The outcome saw the 10-year US government bond rise as the US cut interest rates in September, October and December. Meanwhile, the UK 10-year Gilt (Government Bond) struggled to move higher due to volatility leading up to the UK Budget at the end of November. Notable across the US and UK has been the rise in yields for longer dated debt. This is where the government borrows for a period longer than 10-years. Here, yields across 20-30 years have risen, compensating investors with more returns when lending for longer lending periods. The impact of such yield rises was a fall in the value of the bonds. Ultimately this shows a softening of confidence as governments struggle to reduce their overall debt burden. This is no surprise to us, being a risk we wrote about at the start of the year.

Finally, one of the best performing assets for the year has been Gold. When uncertainty rises, so do ‘safe haven’ assets, i.e. those that historically give the appearance of being defensive at times of uncertainty. In this context, it is rare to see gold rising 53.5% while equities also post such strong gains. There are various reasons for this. Firstly, central banks have been selling dollars and buying gold to defend against the instability caused by the US ‘America First’ policy. Secondly, investors worry about a global slowdown which has yet to arrive. Only the Nasdaq composite Index has now outperformed Gold over the last 10 years in sterling terms. With Gold at all-time highs, it may not prove itself a ‘safe haven’ in 2026, although this could be dependent on whether it continues to benefit from further dollar weakness.

Looking ahead, 2026 has a number of notable events on the horizon, including: US Supreme court ruling on trade tariffs introduced by Trump, the trade deal with China that ends in November, and the US mid-term elections. There will be a new Chair of the Federal Reserve in May, and we should start seeing European defence and infrastructure spending reflected in economic data, helping the European economy to grow. Finally, interest rates are likely to continue a downward trajectory. As we saw with the New Year’s Eve celebrations, it would be a safe bet that we see more fireworks from President Trump in the forthcoming year.

Key positioning for portfolios

The last change to portfolios was on the 14^th November as the Committee enacted a rebalance.
The committee aligned equity and fixed income allocations to target weights focusing on positive earnings growth, interest rate cuts and government spending.
Risk management remained the highest priority, taking profits in areas of strength.
The Emerging markets remains an area of positivity based on supportive government policy, specifically across Asia.

Only the Nasdaq has outperformed gold over the last 10 years - Chris Robinson

Glossary

Capital Expenditure (Capex)

Money invested by a company to acquire, upgrade, and maintain physical assets such as property, land, technology, or equipment.

Bonds (or fixed income)

Types of investments that allow investors to loan money to governments and companies, usually in return for a regular fixed level of interest until the bond’s maturity date, plus the return of the original value of the bond at the maturity date. The price of bonds will vary, and the investment terms of bonds will also vary.

Emerging MarketsCountries with less developed financial markets and which are generally considered riskier than investing in developed markets.

EquitiesAnother name for shares (or stock) in a company.

FTSE All World Total Return Index

The FTSE All-World Total Return Index is a global equity benchmark that measures the performance of large and medium sized companies across both developed and emerging markets worldwide. This also contains the dividends reinvested.

FTSE All-Share Index Total Return Index

The FTSE All‑Share Total Return Index is a comprehensive measure of UK equity market performance, capturing nearly all eligible companies listed on the London Stock Exchange and including reinvested dividends

FTSE China A50 Index

The China A50 index is a FTSE index that enables UK investors to access China's domestic market in real time. The index comprises the 50 largest and most actively traded companies listed on Shanghai and Shenzhen stock exchanges.

FTSE Europe exc UK Index

The FTSE Europe ex UK Index is one of a range of indices designed to help European investors

benchmark their international investments.

Government bonds

A type of bond, issued by a government. They pay out a regular fixed amount of interest until the bond’s maturity date, when the issue value of the bond should also be repaid. In the UK they are called gilts and, in the US, they are referred to as treasuries.

Gross Domestic Product

Consumer spending, government spending, net exports, and total investments. It functions as a comprehensive scorecard of a country’s economic health. GDP may be adjusted for inflation and population to provide deeper insights

Index

An index is a method of tracking the performance of a group of shares, bonds, other assets or factors. For example, the FTSE 100 Index is made up of the 100 largest companies on the London Stock Exchange.

MSCI Emerging Markets Index

The MSCI Emerging Markets Index captures large and medium sized companies represented across Emerging Markets countries. The index covers approximately 85% of the free float-adjusted market capitalization in each country.

Nikkei 225 Total Return Index

The Nikkei 225 Total Return Index measures the performance of the Nikkei 225 that includes both movements in the index level and reinvestment of dividend incomes from its component stocks

S&P 500 Total Return Index

An index that measures the performance of the S&P 500, including price changes and dividends, assuming all dividends are reinvested.

Total return

A way of showing how an investment has performed and is made-up of the capital appreciation or depreciation and includes any income generated by the investment. Measured over a set period, it is expressed as a percentage of the value of the investment at the start of that period.

Yield

The dividend per share divided by the stock's or fund’s price per share and expressed as a percentage. The historic yield is the dividend income distributed during the past year and expressed as a percentage of the share price on a particular day.

Risks

Typically, there is less risk of losing money over the long-term (which we define as over 5 years) from an investment that is considered low risk, although potential returns may also be lower. Investments considered higher risk typically offer greater opportunities for better long-term returns, though the risk of losing money is also likely to be higher.

The performance information presented in this document relates to the past. Past performance is not a reliable indicator of future returns.

Forecasts are not reliable indicators of future returns.

Some of the main specific risks that apply to the funds that these portfolios invest in are summarised here. If the funds that are held in the portfolios change, the types of investment risk that the portfolios are exposed to will also change.

Fixed income investments, such as bonds, can be higher risk or lower risk depending on the financial strength of the issuer of the bond, where the bond ranks in the issuer’s structure or the length of time until the bond matures. It is possible that the income due or the repayment value will not be met. They can be particularly affected by changes in central bank interest rates and by inflation.

Equities (company shares) can experience high levels of price fluctuation. Smaller company shares can be riskier than the largest companies, companies in less developed countries (emerging markets) can be risker than those in developed countries and funds focused on a particular country or region can be riskier than funds that are more geographically diverse. These risks can result in bigger movements in the value of the fund. Equities can be affected by changes in central bank interest rates and by inflation.

Derivatives may be used within funds for different reasons, usually to reduce risk, which can be called “hedging”. This can limit gains in certain circumstances as well. Derivatives can also be used to generate income or to increase the risk being taken, which can have positive or negative outcomes. The derivatives used can be options or futures which are types of contracts that are dealt on an exchange or negotiated with a third party. More complex derivatives may also be used. Derivatives can also introduce leverage to a fund, which is similar to borrowing money to invest.

Funds may have holdings in investments such as commodities (raw materials), infrastructure and property as well as other areas such as specialist lending and renewable energy. These investments will be indirect, which means accessing these assets by investing in companies, other funds or similar investment vehicles. These investments can also increase risk and experience sharp price movements. Funds focused on specific sectors or industries, such as property or infrastructure, may carry a higher level of risk and can experience bigger movements in value. Certain investments can be impacted by decisions made by third parties, such as governments or regulators.

There are many other factors that can influence the value of a fund. These include currency movements, changes in the law, regulations or tax, operational systems or third-party failures, or financial market conditions that make it difficult to buy or sell investments for the fund.

*Funds that are managed to maintain a specific risk profile, or that invest in other funds that themselves are managed to maintain a specific risk profile, may have their potential growth or income constrained as a result.

*Applicable for the Premier Miton Blend Portfolios only.

Important Information

This is a marketing communication.

Whilst every effort has been made to ensure the accuracy of the information provided, we regret that we cannot accept responsibility for any omissions or errors.

Reference to any investment should not be considered advice or an investment recommendation.

All data is sourced to Premier Miton unless otherwise stated.

Source for performance data: FE Analytics.

All performance figures have been given in £ sterling.

Source: FTSE International Limited (“FTSE”) © FTSE 2026. “FTSE®” is a trademark of the London Stock Exchange Group companies and is used by FTSE under licence. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Copyright © 2026, S&P Dow Jones Indices LLC. Reproduction of S&P Indices in any form is prohibited except with the prior written permission of S&P. S&P does not guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions, regardless of the cause or for the results obtained from the use of such information. S&P DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P be liable for any direct, indirect, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with subscriber’s or others’ use of S&P Indices.

Source: MSCI. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI's express written consent.

This document and all of the information contained in it, including without limitation all text, data, graphs, charts, images (collectively, the “Information”) is the property of Premier Fund Managers Limited and/or Premier Portfolio Managers Limited (“Premier Miton”) or any third party involved in providing or compiling any Information (collectively, the “Data Providers”) and is provided for informational purposes only. The Information may not be modified, reverse-engineered, manipulated, reproduced or distributed in whole or in part without prior written permission from Premier Miton. All rights in the Information are reserved by Premier Miton and/or the Data Providers.

Marketing communication issued by Premier Miton Investors. Premier Portfolio Managers Limited is registered in England no. 01235867. Premier Fund Managers Limited is registered in England no. 02274227. Both companies are authorised and regulated by the Financial Conduct Authority and are members of the ‘Premier Miton Investors’ marketing group and subsidiaries of Premier Miton Group plc (registered in England no. 06306664). Registered office: Eastgate Court, High Street, Guildford, Surrey GU1 3DE.

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©Premier Miton Investors. 2025. Issued by Premier Miton Investors. Premier Portfolio Managers Limited is registered in England no. 01235867. Premier Fund Managers Limited is registered in England no. 02274227. Both companies are authorised and regulated by the Financial Conduct Authority and are members of the ‘Premier Miton Investors’ marketing group and subsidiaries of Premier Miton Group plc (registered in England no. 06306664). Registered office: Eastgate Court, High Street, Guildford, Surrey GU1 3DE.